I’m a reluctant payment historian. Over my 30 yrs I’ve seen many payment projects come and go. The latest is the European Payment Initiative’s (EPI) new wallet, Wero. Billed as Europe’s homegrown answer to Visa and Mastercard, it carries the significant political weight of figures like ECB President Christine Lagarde, who frames it as a “march to independence”. While the political ambition is clear, I believe the business case is fundamentally flawed.

The core problem is simple: there is no business case to support “change”.. The EU’s own Interchange Fee Regulation (IFR) from 2015 squeezed payment margins to near zero (25 bps debit, 35 bps Credit). This regulation, designed to lower costs for merchants, has now created a massive barrier to entry for any new network. Why would banks, merchants, consumers, and processors undertake the enormous cost and effort to switch systems for a prize that is vanishingly small?

Today, Wero is merely a person to person (P2P) payment app, akin to Zelle in the United States. Its current bank participation is concentrated in Germany, France, and Belgium. While proponents point to the success of national schemes like Spain’s Bizum or Poland’s BLIK, they miss a critical distinction. Those are largely domestic successes. Wero’s ambition to create a pan-European network is an entirely different and more complex challenge. To succeed, Wero must move from P2P to ubiquity at the point of sale (POS) and in eCommerce. And this is where the economic puzzle becomes unsolvable.

For consumers, the question is, why switch? My existing card is contactless, accepted everywhere, and integrated into my mobile wallet. A customer cannot abandon their card until the alternative has complete feature parity across all channels, markets and devices. Frequency of use drives adoption, and for high frequency categories like groceries, transit, and recurring bills, card rails are deeply entrenched.

For technology partners, the incentives are even murkier. Will Wero create the economics necessary to convince Apple and Google to add it as a payment option in their wallets? Who will fund the development of new software for payment terminals, handle the complex NFC certifications with chipset makers like NXP, and manage the rollout? These are time consuming non-trivial activities..

I recall a conversation years ago with the CMO of CVS about their early adoption of Venmo for POS payments. His assessment was blunt: “No one uses it. They paid us $5M to turn it on… We wanted an alternative because young people don’t know what plastic is anymore. Turns out that demographic wants contactless”. Venmo’s grand POS plans fizzled because P2P popularity does not translate to retail utility. Oh, and WEROs core capability of P2P will be under assault from stablecoin. 

Wero will always be 5-7 yrs behind. While Wero work toward moving beyond P2P, Visa and Mastercard are innovating, pushing new standards and partnerships to enable the future of payments, from stablecoin settlement to agentic commerce. Wero will be stretched trying to catch a moving target (with no economics to drive a change)..

The economic play for the participating banks? They might save 5 to 10 basis points in network fees paid to the card schemes, but they lose out on marketing incentives and must now foot the bill for building, marketing, and securing an entirely new network from scratch. Oh.. and educating consumers, merchants, and tech partners. The math and the plan just don’t add up. Visa and Mastercard are highly efficient networks.. As I’ve often stated, to compete against Visa and Mastercard you need to create a better payment system AND better economics for EVERY PARTY.   While IFR was meant to impair V/MA what it really did was entrench them as no margin exists for alternatives (see blog). 

In my opinion, the prospects for Wero are slim. Political will cannot override market economics. The country to watch is Germany, with its low credit card penetration and high adoption of PayPal, but even there, displacing established habits will require a value proposition that simply does not exist today.